Canadian fintechs are increasingly frustrated at the lack of open banking progress

While the UK is certainly lagging in the move beyond open banking, across the pond in Canada the fintech community would be happy with just the basics.

Canada’s government had previously promised to introduce legislation in early 2023 that would move the country from a market-led approach towards a UK-style policy-led approach.

That deadline came at the end of a three-year industry consultation, and having missed the deadline Canada’s open banking sector was told it would have to wait until the end of this year.

Last week 54 leading fintechs including Wealthsimple, Stripe, Visa and Wise wrote to Canada’s deputy prime minister and minister of finance to call for urgent action.

“Canada began consulting on ways to do this as part of its work on “open banking” — a key facet of “open finance” — more than five years ago,” the letter, coordinated by the Council of Canadian Innovators, reads.

“With the consultations and the report of Canada’s open banking lead, Abraham Tachjian, now complete, the federal government is well prepared to commit to a specific and detailed course of action.”

In recent months fintechs in Canada have launched not one, but two campaigns to push their cause, Canadians for Open Banking and Choose More, both of which are trying to rally public support to add pressure on the government.

“I share the frustration of my fellow Canadian open banking practitioners,” Eyal Sivan, vice president of open banking and smart data at Raidiam told AltFi.

“We are now five years into our open banking journey with little concrete technical progress and many promised delivery dates now behind us, making it exceedingly difficult for the market to plan or innovate in the space.” 

In recent weeks the campaign for open banking legislation in Canada has grown even stronger after the US Consumer Financial Protection Bureau published a new rule that gives Americans the potential to unlock their financial information.

The move effectively opens a pathway towards a policy-led open banking approach, and makes Canada’s lack of a framework even more glaring.

Sivan told AltFi that the US bureau’s decision “if implemented, will leave Canada as the only G7 nation without an active open banking program.”